Contrary to what Abe claims, business cessations hit record-high

The number of businesses discontinued, suspended, or liquidated hit a record-high of 29,583 in 2016, contrary to the claims made by Prime Minister Abe Shinzo in his policy speech.

According to Tokyo Shoko Research, a private credit research firm, this figure rose by 8.2% from a year earlier and exceeded the previous high of 29,047 in 2013.

PM Abe in his policy speech delivered to the Diet on January 20 proudly said, “The number of corporate bankruptcies last year fell to the lowest level in 26 years.”

However, the total number of business closedowns, cessations, or dissolutions in 2016 far exceeded that of business failures, which amounted to 8,446, in the same year. In short, adding the former to the latter, nearly 40,000 business entities closed down last year alone. In addition, an upward trend in the former category has continued for three consecutive years, showing that the Japanese economy is facing hard times.

Tokyo Shoko Research believes that aging employers and a lack of successors in addition to economic uncertainty were major reasons for the largest number of business closures last year. The credit survey company predicts that more and more employers will consistently go out of or suspend their businesses.